Industrial property sales up 25.1% in Q2 as manufacturing grows

Data centres and EVs may be key to the industrial sector’s growth.

The manufacturing sector is clawing back to growth thanks to rising output, lifting industrial property sales and leasing in Q2.

Industrial property sales rose 25.1% to $949.6m in Q2 across 509 transactions, according to data from Knight Frank.

Notable sales include that of BHL Factories at 2C Mandai Estate in May for $74m; the Kian Ann Building at 7 Changi South for $63m in June; and a single-user factory located at 47 Pandan Road that was sold for $36m in April.

Industrial leasing in Singapore saw a 5.9% quarterly growth with 3,123 transactions. However, this is 5.3% lower compared to Q2 2023.

The value of rental transactions, meanwhile, remained similar with a marginal quarterly growth of 0.5% to $28.7m.

The rise in sales and leasing comes as the manufacturing sector saw an increase in output for Q2 and in May. The sector recorded a 0.5% expansion in the second quarter– although it is 0.6% lower than in the first quarter.

Singapore’s total manufacturing output rose 2.9% in Q2 compared to the same quarter in 2023.

“Manufacturing in Singapore has turned a corner alongside the economy, as international manufacturers continue to make investments for the promise of stability and access to Southeast Asian markets,” said Calvin Yeo, managing director and head of occupier strategy and solutions at Knight Frank.

“With output growing progressively positive, especially for the electronics sector and semi-conductor manufacturers that are building or opening new plants in Singapore, business expectations for the manufacturing sector are turning increasingly optimistic,” Knight Frank said.

In the near future, Knight Frank expects demand for industrial properties eto remain supported, which in turn may potentially increase their sales activity further when interest rates are cut.

Data centres and the adoption of electric vehicles (EVs) will be growth drivers to support the industrial sector, according to Knight Frank.

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